1. IMPORTANT TERMINOLOGIES
- Levels of hierarchy = levels of responsibility in a business
- Chain of command = formal route that a decision in an organization must follow
- Span of control = numbers of subordinates are directly
- Delegation = giving one's subordinate the authority to make a particular decision or carry out a particular task while still keeping the responsibility for the outcome of that task or decision
- Centralization = indicates that all major decisions in the business are made by a small group of employees that work closely with the head of the business
- Decentralization = the opposite of centralization.
- Bureaucracy = relative importance of rules and procedures (administrative system)
- De-layering = removing a layer in the hierarchy of the business, which means the removal of a layer of management (being less bureaucratic, increasing the decision-making capability of middle managers)
2. types of organizational structures
- Tall organizational structure = many levels of hierarchy, narrow spans of control, long chains of command, centralized decision-making and limited delegation
- Flat organizational structure = few levels of hierarchy, wider spans of control, shorter chains of command, decentralized decision-making and increased delegation
- Organizational structure by hierarchy = Individuals at the top have more authority than those below them. a traditional way of representing structure of a business
- Organizational structure by function = where employees are grouped by departments they belong to
- Organizational structure by product = based on what a particular business produces
- Organizational structure by region = present in business that carry out certain aspects of the business activity in different parts of the world
3. changes in organizational structures
- Project-based organization = a market structure in which employees are organized around different products that a firm carries out. Very flexible and responsive to market demand. There are project managers that delegate and are responsible for a particular project. After the produce is done, the team is split up and reassembled to begin another project.
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